DOJ files e-book price-fixing lawsuit against Apple, publishers

The publishers feared Amazon.com's prices would set customer expectations for e-book prices, the DOJ says

By Grant Gross | 11 April 12

The U.S. Department of Justice has filed an antitrust lawsuit against Apple and five large publishers, accusing the companies of working together to raise prices of e-books.

Defendants in the lawsuit, filed Wednesday, are Apple, Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster. The six companies conspired to raise prices on e-books in retaliation to Amazon.com pricing most e-books at US$9.99 beginning in late 2007, the DOJ said in court documents. Hachette Book Group, HarperCollins and Simon & Schuster have agreed to settle the lawsuit, according to the Wall Street Journal.

The DOJ lawsuit seeks to invalidate alleged e-book pricing agreements between the publishers and Apple. Apple declined to comment on the lawsuit.

In early 2010, publishers agreed to shift to a new pricing model where they set the prices for e-books, instead of retailers, the DOJ alleged. In an agreement with Apple, all new books would be priced at $12.99 to $16.99, the DOJ alleged.

Each publisher "knew that, acting alone, it could not compel Amazon to raise e-book prices and that it was not in its economic self-interest to attempt unilaterally to raise retail e-book prices," the DOJ said in its lawsuit.

The publishers "feared that lower retail prices for e-books might lead eventually to lower wholesale prices for e-books, lower prices for print books, or other consequences the publishers hoped to avoid," the DOJ said in court documents.

The European Union launched its own investigation of e-book pricing in December.

(More to follow.)

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is [email protected]